Pooling does not work in volatile markets

[just_wondering]

I was talking to some people this week about the grain industry, and the point was made several times that Pooling does not work in volatile markets. And that this year Barley is the perfect example.
Could someone more literate than me please explain, and then if you could send your letter to every news paper in the designated area( I could help in this if you want)
It seems obvious but how to write it out?

[TOM4CWB]

just_wondering;

If Pooling does not work in volatile markets... then when would it ever work?

Flat prices don't need a pool in the first place... unless the CWB needs to hide give away sales under the table!

So is the true value of the CWB/pooling... market undercutting without transparency or price accountability?

The CWB has turned the Basis in our Fixed Price Contracts into a POOL!

What a scam.

At Informa it couldn't have been clearer... Growers with 07 FPC's got sucker punched... Look at the basis charts over the last 5 years... the pool is now in the basis as the volume increases into Fixed Priced Contracts.

[kamichel]

I have an averaged price sorta like a pooled price, that is from a hog feeder barn investment. The investors have a feed grain commitment. They pay us the average of what they have to pay for the year, so we get paid an innitial price then as in last year we got two after payments. We have a choice to deliver wheat or barley but must be decided on at the beginning of the year. It is a true average of what the market is. I have no problem with it. The price is decided on the open market basis that other farmers are selling for and what users must pay. Growers and end users set the price.
I am not the most literate, but seems to me to be the opposite of the CWB where they set fixed prices to producers basis off the pooled sales where as in the hog barn investment the pooled sale is bases off of the fixed prices. Did this make any sense???
Basing fixed prices off of pooled sales would reduce farmer control. Basing pooled sales on fixed prices increases farmer control. Did that make any sense or did I drink one too many wiskey?

[TOM4CWB]

kamicheal,

What you say, in practice has been what I have said for years... the CWB has an obligation to transparency and accountability by providing daily cash prices every trading day.

The pool accounts...and now the basis as well... are slush funds for the CWB to allow price discounts/coverups in a non-transparent manner for CWB lack of proper risk mitigation.

We are now at the stage where CWB pricing programs are causing much higher risk, to growers, than they mitigate.

At least with an accountable transparent cash price... you price it and live with the decision. Primarily used to contract actual grain inventories... the risk that this method of selling our produce should be, the least at risk, of mismatching needed sales of actual grower grain inventories.

How many times has the CWB sold the same inventory twice... or three times?

All indications are that the CWB is NOT properly tracking their futures trades. Transparent accountable tracking of individual trades is not available to growers... but it MUST be!

Futures Trading is causing huge problems for others than just the CWB.

The following DTN article explains that the past year is stressing all industry participants.

http://dtnag.com/dtnag/common/link.do?symbolicName=/free/news/template1&vendorReference=0f4971e5%2D73db%2D4414%2 Da3b8%2D39bac7e6ddf6

I hope this link works... it is important we understand what has happened!

This "problem" however does not excuse the CWB from providing reliable risk management products & transparent accountable pricing tools.

Instead the CWB CORP has FAILED their growers by doing the opposite of their claim... and blaming every one else but themselves for their lack of accountable risk management of futures positions.

The Basis on CWB FPC's couldn't give a stronger signal... that this is in fact the case.... the CWB is well beyond the management capacity to handle the risk it has exposed growers to. This is a BIG problem... and CWB Directors had better get it under control.

An independent inquiry into CWB futures trading is needed to see just how far off track these folks are!

[bgmb]

just_wondering

Pooling is a joke if the CWB would move beyond the idea that long term pooling has to be at the centre of everything they do they would serve farmers much better than they do now.

Times have changed the CWB has not